It is the requirement of the MBA course Comsats Institute of Information Technology Sahiwal campus that all students of MBA have to spend two months in any organization to get practical exposure and to get familiarized with the ways to live in the organizational environment which is dramatically different from the educational environment. That two months period called “Internship Period “, if spent properly and sincerely, enables the students to be more confident, more knowledgeable, more responsible and, above all, more committed to its work in the practical field. I have also been assigned to do internship of six weeks period in Servis Sales Corporation, which is a Pakistani local company and have 60 years experience in the market. This internship period in Servis Sales Corporation has enabled me to understand the practical scenario and sharpen our decision making power and utilizing the resources in an effective manner, so that by using our resources, how we can maximize our profit. In preparing this internship report, I have put all of my best efforts and tried my level best to get maximum knowledge about SSC. Despite of my all the coherent efforts, I do believe that there will always be a room for improvement in the efforts of learner like me.

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Umer Shoaib Pirzada

ACKNOWLEDGEMENT

The whole praise is to almighty ALLAH, creator of this universe. Who made us the super creature with great knowledge and who able me to accomplish this work. I feel great pleasure in expressing my deepest appreciation and heartiest gratitude to my Teachers of Comsats and to the staff of Servis Sales Corporation for their guidance and great help during the internship period. I would like to express my deepest affection for my parents and friends who prayed for my success and encouraged me during this internship period. I appreciate and acknowledge the patience, understanding and love provided by employees of SSC. A token of special thanks to the following people who had been very friendly, co-operated with me throughout my internship period in Servis Sales Corporation and made it possible for me to learn and gather all the information needed for my internship report with as much detail as I could. These are the people who in spite of their busy scheduling took time out to explain to me the procedures and mechanics of work in the organization. My internship report would not have been possible without friendly and helpful attitude of following people. Mr. Fahim Akbar Mian Mr. Younas Manager HR

Servis Group is Pakistan's largest footwear manufacturer and exporter. It also has interests in retailing. Its Group Company, SSC Private Limited, is the country's largest retailer and wholesaler of footwear. The Group was set up in 1958 and today has sales of more than PKR 9 billion. The Company runs its footwear retail business under Servis brand as Servis Shoe Stores. It has further established some of the most loved footwear brands including Don Carlos, Cheetah, Calza, Liza, Toz, and Skooz. It also has distribution alliances with leading international brands in footwear including NIKE, CAT and exclusive franchise of ECCO in Pakistan. SSC a part of Servis Group Which has a rich heritage spanning over half a century and is today regarded as one of the most respected corporate citizens. The Group invests actively in CSR initiatives and projects – nationally as well as abroad. SSC is respected for its innovation footwear designs which are a result of its considerable invest in merchandising and product development departments. This has proven to be a

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driving engine for the business that has produced millions of satisfied customers. The Company has strategic relationships with Group companies which offer world class footwear manufacturing facilities in Pakistan.

SSC Retail Business currently comprises Company Operated Stores, Agencies, and Factory Outlets. The business is now eyeing Large Format Stores and Franchise Stores as its future growth engines. Servis Group employs close to 8000 people in its following Group Companies:
• • • • •

Above all are separate entities and work their own. Like there are three two outlets yet of Shoe Planet in Lahore and Karachi where there are imported brands with Servis shoes are available. Shoe Planet is a really a big outlet. Soul collection is dealing in ladies shoes and same like Stylo. There is a wide range of ladies shoes is available all the time on Soul Collection and Soul collection has their own network. Servaid Pharmacy as the name mention is dealing in Pharmacy and has a good name in the field of Pharmacy and this is now a growing business of Servis.

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Introduction

Walking on the roadside, running on a track, climbing the rocks, going for a formal meeting or simply shopping on weekend, one thing is an imperative for you. That’s footwear. Nothing compares to a pair of shoes that are trendy and comfortable, and this is where Servis comes in. Making its debut in 1964 in the footwear industry of Pakistan, Servis today has become the most sought after name in the shoe industry. Servis Sales Corporation is the flagship company of the group with headquarters location in Lahore. Servis started its operations with a small factory in Gujrat and established its second factory at Muridke Seikhupura Road in 1987. Today Servis is the largest footwear exporter of the country. Winner of FPCCI trophy for best export performance six times, product innovation is the most important element in company’s marketing strategy and that is what makes Servis, a shoe company par excellence. Popular Servis brands include Cheetah, Don Carlos, Calza, Liza, Skooz, Toz, Servis and more. Servis offers a new product range twice a year at the beginning of summer and winter seasons.

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Servis enjoys a rich history of excellent performance. You can bank on Servis for your requirements. Unshakeable trust, unmatched products, superb quality and an amazing ability to satisfy the ever increasing needs of its clients are some of the qualities that make Servis your unbeatable partner.

 Become a 10 billion rupee company by 2012 through leveraging its brands, distribution and retailing strengths.  Leverage technology to gain competitive advantage.  Strive to provide an environment where employees will be developed, rewarded and provided with greater opportunities.  Continue to improve the quality of life of it’s employees and their families.

Departments

The following are the departments where I worked as an internee and experienced a good time with the Servis employees. • • • • Factory outlets Department Corporate Sales Department Supply Chain Department Whole Sale Department

Schedule

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I divide my 6 weeks according to letter plan given by HR Manager, and spent two weeks in Factory Outlets Department with Mr. Mudassar Ikram who is supply chain analyst then two weeks in corporate sales department with Mr. Rashid Rafique who is Corporate Sales Officer then two days in Supply chain (Retail) with Mr. Usman Barkat (Senior Merchandise Planner) and Mr. Qaiss Aslam(Merchandise Planner) and then finally two weeks in Whole Sale Department with Mr. Adnan Akhtar(Category Manager) and Awais(Category Analyst).

Factory Outlets Department

Hierarchy of Factory Outlets Department:

Business Manager Mr. Younas

Supply Chain Analyst Mr. Mudassar Ikram Internship Report MBA

Supply Chain Analyst Mr. Ghulam Muhammad 9

There are 33 factory outlets in all over the Pakistan. Servis Sales Corporation which is working under Servis industries Private Limited is doing its business in retail which is further divides in FOL and A pair. According to management FOL is very small part of their business however retail is big Giant. FOL strategy is very simple. FOL strategy is to sale the rejected material of factories special low price articles, dead articles which are not giving sale on the shops and also some A pair articles which are specially prepared on order from Local venders. I understood from this that the main purpose of FOL is to help out the company and save from losses which may be company have to bear because of rejection without existing of FOL. Reference: Mr. Younas (Business Manager)

Servis Sales Corporation has 6 sources from where it takes delivery of shoes.
There are two Servis Factories. 1. Service Industries Limited Gujrat 2. Service Industries Limited Muridke There are 3 LPO’s (Local Purchase offices) which is now known as Sourcing Office.

3. Karachi,
4. Lahore 5. Faisalabad. And the last source is: 6. Imports. Working of these LPO’s is to develop the vendors. As Servis has 2 factories in Gujarat and Muridke which are full pack means these factories produce fully according to their maximum capacity, but this production is not enough for Servis retail so then Servis go towards outsource from their Sourcing offices which are in Lahore,

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Karachi, and Faisalabad. The Supply chain Analyst according to their need place the order after checking out all the needed factors like closing stock, demand and last fortnight sale and the sourcing department make shoes from the local venders and then Supply chain analyst allocate the dispatches according to their factory Outlets need.

In FOL there are 4 types of shoes.
1 A-Pair 2 Rejections 3 Imports 4 Low Price Articles The purpose of factory outlets is to promote the Retail (A pair) and grow customers and to sale the rejection.

Target Customers.
Basically Factory outs is working on rejection and special low price articles, so our targets are low income people who cannot purchase imported brands and costly shoes.

Source of FOL
From the production of the factories when there is some rejection(not 100%) means error up to some extant occur in the pair then these articles go towards factory outlets then Factory outlet sale these articles at low price, sometimes FOL have to face a problem like sometime there is less rejection in the factories which do not fulfill the need of factory outlets then FOL makes estimates and give orders to Sourcing offices according to their needs and sourcing offices from the venders make articles according the production order of FOL. Reference: Mr. Mudassar Ikram (Supply chain analyst)

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Franchising
The interesting thing is that Servis does not give Franchise of FOL to Public. All the 33 Factory outlets are SSC owned. But Servis is giving Franchises of Retail (A pair articles).

Development
Servis retail shops are going to become online in coming days but now all the shops managers send their data to Mantaq solutions who converts this data into soft copy.

Working of a Supply Chain Analyst
Mantak Solutions(Computer related company who is working for SSC)send the soft data to supply chain analyst which they receive from outlets then supply chain analyst analyses this data and make their estimates that how much they have need for their outlets and how much they should give order and how much articles and for which outlets. Then they send Po (production order).

Brands of FOL
The following are the brands of Factory outlets Cheetah Liza Calza Skooz Toz Don Carlos.

Categories and Ranges
There are different categories and different ranges of sizes.

Targets and Profit
FOL targets are 140% of previous year. Only FOL targets are 39 karores in 2008 of which round about 15 karores have achieved. 1st six month of the year is not so much running and profitable and maximum sale is related with the last six months.

Promotional Strategy
The recent promotional activity which Servis has introduced is “Jeet Ka Shashka” A scheme for the end user, Cash prize through scratch card to every customer who consumes more than 500 RS.

Price Range
The FOL’s articles price is very economical and for low income people and FOL’s price ranger is less than 700-800 rupees.

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Distribution Channel
SSC is very choosy about place and open their outlets after determining many aspects like population of the area , income of the people of that area , competitor in the area , location etc.

Product Development
FOl receive photographs or samples of articles from the LPO’s and then choose different articles which like most and then order for the production according to need.

Future Planning
Servis plans before the beginning of the year and the season. Like June is going on and the Management is planning for Eid and winter. In the retail shops Servis sales their A pair articles through the advertisement then near the off season through sales then through reduction in prices and if some articles are blocked(not sale) then company stop to the production and send these all articles from retail to FOL and sale these articles on low prices in FOl and they plan like 5 years planning, next year planning, this year planning, Event planning, seasonal planning etc, and think about the coming event round about 6 months like now Eid is coming and we have made all the plan about Eid because our 38% target sales come from Eid.Servis divides the cities in different districts and this is their own setting for understanding, following is the detail. Reference: Business Manager

All the Servis articles have different codes like Calza 350, Skooz 270, and Liza 429 etc. There is no duplication chance in FOL and Retail shops. There are different slabs of different articles like if article Calza 350 has become a dead item in retail shop then if company wants to sale this article on FOL. then there is a slab of this article which tells that at which price to sale this article. Servis outlets have above 80% articles available all the time. Servis like its competitor ‘BATA’ imports shoes from venders. The business manager and the team visit China and give them order according to their need so in this way Servis imports. Now the question is … why there is need of Imports? Because in Pakistan they have to bear much cost and also Production is also not fulfilling the need. In FOL dept, there are only three main persons who are working and giving business of billions to the company. One who watches factories, one

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who watches LPO’s and one is the business manager who watches all the things and also plans how to generate profit and make all the decisions. Two years before when the name of Factory outlet was B pair shops at that time there was some difference in shops, Company was not showing its interest in FOL and shops were old, not decorated and not giving sales, but two years ago company changed its thought and gave value to FOL like now our FOL shops are same like A pair shops, these are also renovated and furnished and giving different schemes like now “Jeet ka Shashka”. Targets set by Management himself by estimating their sale to check out last year performance and by new opened shops. Like if target increases by 40% then 20% target from old shops, 12% from new opened shops and the left target from sale or reduction. Reference: Mudassar Ikram (Supply chain Analyst) This is some facts and figures of last year.

Target sale Pairs.

Last year Sale value(achieved value) 184,998,548

Target Value for this year 240,713,900

Target Sale value(achieved value) 280,572,013

888,374

In first row there are target sale pairs which the company assigns to sale minimum pairs. In second column there is the value of target sale which the employees achieved on the base of this value the company assign them RS. 240,713,900 target sale and they achieved more than the target which is 280,572,013. We can understand easily from the following graph.

This is the hierarchy of this department. Country manager Shahid Iqbal

Senior Manager Attiq—ur-Rehman

Asst. Manager Asim Majeed

Corporate Sales Assosiates Mr Rashid

Corporate Sales Assosiates Faisal Imtiaz

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Today, Servis is fully geared to deliver the best to its corporate customers. Unshakeable trust, unmatched products, superb quality and an amazing ability to satisfy the ever increasing needs of its clients are some of the qualities that make Servis your unbeatable partner. No matter how big the consignment is or how fast it has to be delivered, Servis is always there. Servis enjoys a rich history of excellent performance. You can bank on Servis for your requirements. From safety shoes to trendy sandals, from highly quality joggers to matchless formal footwear nothing compares to Servis. Popular Servis brands include Cheetah, Don Carlos, Calza, Liza, Skooz, Toz, Servis and more. Servis offers a new product range twice a year at the beginning of summer and winter seasons. Corporate sale department is very small department as compare to Retail and wholesale but here the working is interesting because the main reason is there is direct interaction with the customer.

2) Law and Forces shoes for Army and Police. 3) Third one is all the simple shoes like Cheetah and Don Carlos etc. Reference: Mr. Attique Ur Rehman

Price Range
Rs. 800 to1800 per pair.
Corporate sales department actually based on the concept of Customization. To change the product or to make the product on the demand of their customer which fulfill the customer's need? Safety shoes is a shoes which is actually for the safety of the employees of any organization especially who are working on the sensitive places like People who works electricity department, oil factory, sugar mills etc. The main source of the corporate sales business is Tenders. They observe every tender specially bulk quantity tenders which give them a good business. There are two types of bids in tenders one is Technical Bid other is Commercial bid. Reference: Mr. Rashid Rafique Mr. Attique who is the senior manager of corporate sales told me that the last year target of corporate sales department was 100 million which they easily achieved and now we are looking for 140 million minimum. We can say that this is the smallest department of Servis Sales Corporation and we can easily determine this thing from their targets as we had seen the Factory Outlet. But to run this department seriously is really necessary because to stand in the market and not to give way to the competitor, this is also a source of advertisement also up to some extant and company is gaining a heavy profit from here.

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Strength Servis has a main strength which makes the Servis superior than other footwear's that is Direct Inject technology. Direct inject technology is a technology by which company makes the shoes as a single piece, there is no any kind of stitches etc in these shoes, and this technology is in the Gujrat factory not anywhere else. As we can see Servis has covered all the major companies of Pakistan by mentioning this latest technology. Reference: Faisal (Corporate Associate)

The above are some famous and major clients of corporate sales. I also checked all the files of these companies their quotations, Invoices and Goods receiving notes and make the filing of the new ones.

Process
• • • First of all search of the customers from different sources like the main source is internet then newspaper, tenders etc. Categorized these customers. Then contact to these customers through phone and get the information.

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• Then senior manager Mr. Attique-ur-Rehman meets these customers.
• • Introduce the product to customers. Then customize the shoe according to customer need. Like if they don’t want laces on the shoes then remove the laces, if they say that soul should be like this then soul must customize like that etc. Receive the Query from customer. Check availability. Then give the quotation to customer

• • •

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This is an example of an original Quotation which company sent to its customer Engro Chemical-Pakistan-Ltd.

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]

•

Then customer send purchase order to company. The following is an example of a Purchase order which customer, Engro chemical sent to the department.

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• • •

•

Then corporate department give Production order to factory. Follow up the factory because time is the main factor in all the process. Then send a copy of GRN (Goods receive notes) to the factory and a copy to Logistic department. GRN is that when the customer receives the product sign on the note and the delivery person submit the copy to Logistic.

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Document Process for Sales
There are two types of sales. Tender Sales Data/Listing Tender add/Information Telephonic/Introduction Letter Collection of Tender Form Query/Requirement Making of Earnest Money Quotation and Samples/Catalogue Samples Purchase Order from Customer Quotation Production Order to Source Tender Participation Confirmation of Production of required Convincing Visits Shoes GRN/Supply Bilty Invoice from Source Signed GRN from Logistics Sales Tax Invoice from A/Cs for customer Payment Tax challan Letter of Intent Purchase Order Return of Earnest Money Security Deposit Production order to source Confirmation of Production for Inspection call Inspection Approval Inspection Certificate GRN/Supply Bilty Invoice from Source Signed GRN from Logistics Sales Tax Invoice from Accounts Deptt. Payment from Customer Return of Performance after Completion of Period Direct Sales

Supply Chain

Hierarchy of this Department

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GM (Abbas Ali Sherazi)

Senior Planning Manager

Planning Manager

Planning Manager

Planning Manager

Merchandise Planner

Yousaf
Muneer

Qiass Aslam

Fahad Sadaqat

Sheraz Baig

M Usman

-

Sara Tufail

Zaid Bin ShahRu

Supply Chain department.
In actual Supply chain is about the planning and distribution of Retail. All stages involved, directly or indirectly, in fulfilling a customer request. Including the manufacturers, suppliers, transporters, warehouses, retailers, and customers. Within each company, the supply chain includes all functions involved in fulfilling a customer request (product development, marketing

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operations, distribution, finance, customer service. Customer is an integral part of the supply chain. Includes movement of products from suppliers to manufacturers to distributors, but also includes movement of information, funds, and products in both directions. Probably more accurate to use the term “supply network” or “supply web” Typical supply chain stages: customers, retailers, distributors, manufacturers, suppliers. All stages may not be present in all supply chains. Reference: (Mr. Qaiss Aslam) 3 Categories: • • • Men Ladies YBGC (Youth, Boys, Girls, Children)

Men category look after by Mr. AbuBakar, Ladies look after by Miss Samia Saleem and YBGC look after by MR Usman Barkat. Each category is divided in subcategories which are the responsibilities of the other members mention in the hierarchy. Subcategories are: Men, Ladies, YBGC Support Shoes Shoe Moc Chappal Sandal Canvas Havai PVC EVA Maximize overall value created. Supply chain value: difference between what the final products is worth to the customer and the effort the supply chain expends in filling the customer’s

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request. Value is correlated to supply chain profitability (difference between revenue generated from the customer and the overall cost across the supply chain) Supply Chain Planning • • • • • • • • • • Definition of a set of policies that govern short-term operations. Fixed by the supply configuration from previous phase. Starts with a forecast of demand in the coming year. Planning decisions: Which markets will be supplied from which locations Planned buildup of inventories Subcontracting, backup locations Inventory policies Timing and size of market promotions Must consider in planning decisions demand uncertainty, exchange rates, competition over the time horizon Reference: (Usman Barkat)

Feedback I spent only two days here in supply chain department and this was the cooperate of Mr. Usman Barkat and Mr. Qaiss who guide me so well that I am able to know about the Supply chain department only in two days.

Depots are the channels from where whole sale department distributes or sales shoes to dealers. There are 13 Depots in all over the Pakistan. There are round about 2000 registered and non registered dealers. Every Depot has a big store behind the show room. Dealers come and make choice of their own and place the order that this article we need in this quantity then if the stock is available at the store then the store keeper dispatches otherwise make order to the wholesale department and the wholesale department according the present and future need place the order towards the factory.

Requirements to become a Dealer
To become a dealer first of all the candidate has a place of his own and then he have to fill a form and submit a non-refundable amount of RS. 500. There are two types of dealers, one is registered and others are non-registered dealers. Who pay the fees is registered and who do not unregistered. Registered dealers have a benefit of discount and credit facility more than non-registered. Reference: manager) Mr. Awais (Category

Targets and achievements
Last year target of whole sale was 1.56 billion rupees. The department achieves 1.61 billion.

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Process
Whole sale department receives APD from Depots 3 months ago. On the basis of previous, sale, stock, demand etc send order for production. In case of factories there are daily dispatches. In case of Local, give allocation for one month. In case of imports no involvement of Depots exists. Whole sale department with their own will and demand send order in case of imports. Then when the consignment comes distribute in the field total consignment through the depots order and own forecasting.

Market Survey
Then on 17th July 2008 I went to market on two shops on a survey. I visit Barkat Market shop and Y block market in Defense I checked the new articles of Skooz which recently come from Local purchase these were Skooz 328, 367, and 366. I checked their sales but that was nil because these were recently coming articles. I asked about the best article of the year. That was PB05 and PB01. In ladies GL06 chappal was most selling item. In Barkat average price of article was 1000 RS. In Defense average price range was 2000 RS.

Customer Relationship Management
To develop customer relationship management Servis provide Loyalty cards to their Loyal customers. Every customer who consumes 1500 RS to purchase some article can become a loyal customer and can get Loyalty card by filling a form and then after some process company dispatches the card. Company also sends catalogues on customer’s addresses. One time entry on every 500 consumed in the shop. Last year one person won a car who belongs to from Jhelum then company advertise him through ads photographs and print media. Company also provide after sale services.

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Marketing Strategy
SSC use aggressive marketing and take advantage through give ads on TV channels, different campaigns and promotional activities so their competitor is so far from them on this side.

Advertising
There is a team who plan that when there is need of advertisement and how to advertise or running a campaign but there is no advertising agency of Servis so Servis use outsourcing from different advertising agencies.

BCG Matrix

SSC
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This was not difficult for me to find that where SSC falls in BCG matrix. SSC falls in Stars situation because Stars generate large amount of cash because of their strong relative market

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share, but also consume large amounts of cash because of their high growth rate; therefore the cash in each direction approximately nets out. If a star can maintain its large market share, it will become a cash cow when the market growth rate declines. The portfolio of a diversified company always should have stars that will become the next cash cows and ensure future cash generation.

SWOT Analysis

Following are the strengths, weaknesses, opportunities and threats which I personally observe in the company.

Strengths:
Largest footwear group in Pakistan 60 years experience Old employees Accessible to all income segments in country. Geographical coverage Variety of products Image of durable shoes Strong market share in sports and school shoes

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Brand name like Cheetah, Don Carlos

Weaknesses:
Female market penetration is weak Low aspiration value in high income group Don Carlos communication seems to be static. Need to find ways to build on the strong equity of the brand. Weak corporate image of Servis group Distribution network as compare to Bata is little bit weak.

Opportunities:
Penetration in the female segment Creation of innovation and customized products Further segmentation within sports segment Improve shopping experience at retail outlets Major portion of market untapped

Threats:
Stiff competition in the market from local and foreign brands Aggressive marketing tactics by other shoe manufacturers. Different market segments have been targeted by competition.

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Unbranded small players competing against different brands of Servis

Recommendation

 Servis sales corporations is weak in its competitors analysis, because when FOL or
Retail sets their articles prices they should be aware of competitors prices so I will recommend that they should also study to their competitor that what are Bata’s strategy like which campaign or pricing strategy Bata is going to launch.

 MIS system is weak. So there should be such team who operate marketing information
system.

 Prices are high of SERVIS articles because now in the market there are China shoes
and local companies, so now there is need to be reduce the prices.

 Promotional activities are same which were 10 years ago, like a low quality ball with
every Skooz so there is need to change them in this modern Era.

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 Rewards and compensations are not satisfying to its employees, so there should be such rewards and benefits that if employees achieve the targets then they should be satisfied.

 Servis should allow some degree of freedom in its policies and work procedures and
policies according to the environment and conditions of Pakistan without having to ask for permission every time.

 In the outlets of Servis there is no availability of all the articles that’s why positioning of
Servis in general customer is that there is no development in the shoes or the young generation thinks that there is no funky shoes which will attract them so Servis should make positioning in the mind of customer about their developed articles and fleets.  Budget of FOL is not enough, budget should be increase because FOL is targeting low income people and giving a good business to company.